Question

Collect the weekly share price data (adjusted close) of State street corporation and the price data for the S&P500 market index for the period of one year. Calculate the weekly returns and graph the returns of the share prices and the index over the period (assume no dividends)

Answer 1

Share price of State Street corporation has risen from $58 to $65 during last week and the index has risen from 2931 to 3045 in the past week.

Weekly returns of state Street corporation has been around closer to 10% while the index has merely return close to 5% in the relevant duration.

The share comparatively shown an out performance with regard to the index because of a specific market event which was related to state Street corporation and it has seen its prices going up while the index has also been able to run on very high level of conviction on the upside because people are highly bullish on the economy after the event of coronavirus unfolded and they are buying in chunk, so, the index is showing very high rate of recovery and return.

The returns are highly reflective of the sentiments of the investor and the fundamentals of the company which has changed as well as the fundamental of index which is also sound because the American economy is back on the growth track as it is being protected by various economists.